Brazilian pork exports increased 38.74% in first half of 2020

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The Brazilian pork market continues to recover, with an increase in the pace of business along the chain, favored by the process of quarantine relaxation that occurs in several states. Moreover, producers seek corrections to the price of their product due to increasing production costs. It is worth noting that demanding activities such as restaurants and malls are working with reduced capacity in the country, and as they return to a pace considered normal, they can open space for new adjustments, both for wholesale cuts and live pigs. COVID-19 is still a concern, considering that government authorities have not ruled out new restrictive measures to social mobility should the spread of the disease speed up and the number of beds decrease in states. Only a vaccine or an effective treatment to fight the disease will be able to mitigate this tension.

An important point to be analyzed and that should affect the market’s progress in the medium term is the deep Brazilian economic crisis, with deterioration of the income of households and increase in the level of unemployment. Domestic consumption has improved, but it will not return to the level registered in the period before the pandemic and, therefore, a high flow of exports along with production adjusted to the crisis scenario will be fundamental for the balance of the market in the second half of 2020 and throughout 2021. For Brazilian production, Safras & Mercado estimates 4.667 million tons of pork in 2020, up 3.6% from last year’s 4.506 million tons.

As for Brazilian exports, the figures for the first half of the year were strong, driven by Chinese purchases. According to data from the Foreign Trade Secretary (SECEX), Brazil exported 471.067 thousand tons of pork in the first six months of 2020, up 38.74% from 339.524 thousand tons in the same period of 2019. Out of this total, 230.645 thousand tons went to China, a share of 48.96%. In relation to the first half of last year, exports to China grew by 152.67%. The second largest importer was Hong Kong, with 92.621 thousand tons between January and June 2020, up 20.58% from 76.811 thousand tons in the same period of 2109. Hong Kong and China together account for a share of 68.62%.